The UK warehouse market saw transactions totaling 4.8m sq ft in Q1 of 2017, with above average take-ups recorded across the country’s core regions, including the North West, South East and West Midlands, according to Savills.
The West Midlands had one of its best quarters ever with take-up 100% above the long term average for the region and equalling the 2.1m sq ft achieved in Q1 2015. The significant increase in activity was attributed to two major off-market deals conducted by Logicor, where XPO Logistics has taken 650,000 sq ft in Tamworth and Jaguar Land-Rover has taken 557,000 sq ft at Fort Dunlop, both on 10 year terms. Combined, this gave Logicor a 58% market share in the West Midlands.
Savills also recorded above average take-up in the South East and North West of the UK, which reached 620,000 sq ft and 904,000 sq ft respectively.
Savills research shows that as much as 27% of the take-up in the first quarter was for speculatively built units, accounting for seven out of 23 transactions across the UK. Examples include 110,000 sq ft at Banbury Cross let to Charge Automotive, 357,000 sq ft to a large online retailer in Bolton and 225,000 sq ft, also in Bolton, to parcel company Whistl, indicating strong activity from a range of different sectors.
Richard Sullivan, national head of industrial & logistics at Savills, said: “Whilst take-up overall has decreased following a record breaking 2016, regional activity remains strong particularly in the UK’s core industrial markets. As a result, the figures prove there is still significant appetite for speculative development from a variety of occupiers, which should encourage developers to continue to build new stock to satisfy ongoing demand.”
20 April 2017
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